National Ass'n of Greeting Card Publishers v. United States Postal Service

Background

A federal independent postal agency requested new postage rates and a separate federal rate-setting commission held hearings and recommended a schedule. The dispute focused on how strictly the law requires rates to be based on detailed cost-of-service studies — essentially, which costs must be shown to be caused by each class of mail. Lower courts reached different conclusions, and the Postal Service Governors allowed the rates under protest while the courts reviewed the matter.

Reasoning

The Court read the statute that requires each mail class to bear costs “attributable” to it and to bear its portion of other costs “reasonably assignable.” It held that the statute reasonably supports a two-tier process: first, attribute costs that can be shown to result from a class; second, assign remaining costs using the other listed factors. The Court said expert agencies may choose reasonable methods to show causal links and rejected a requirement that agencies follow a specific three-tier accounting formula.

Real world impact

The decision leaves technical choices about cost methods to the expert agencies rather than imposing one accounting theory. Regulators must still seek better data tying services to costs. Because prior rates relied on an incorrect legal view, the Court sent the contested rates back to the agencies to reconsider and apply the ruling.

Dissents or concurrances

Lower courts and industry groups had sharply different views on how strictly cost studies must control rates; the Court resolved that agencies have discretion, not an absolute duty to follow one accounting theory.